Addressing the Question: Measuring Advertising ROI

One of the hardest questions, I think, for marketers and advertisers to answer is the dreaded question “How can I measure my advertising?” because, unfortunately, it just isn’t that simple. That isn’t to say that there is no way to do it, it just is a lot more complex than most would think. So, this post is a listing of my three favorite ideas on how to explain the complexity of advertising return on investment  (ROI) to someone when they ask the question.

The Team Concept

Especially helpful if the person plays or watches sports, for this explanation, you ask the person to think of a team sport, such as hockey. Then, ask the person to identify only one person from the team who responsible for the most recent win of that team. Depending on what type of sports fan they are, they might mention the coach or the star of the team, but the reality is, it takes the whole team to win or lose a game. Each person plays a part in the end goal. Then you can explain how advertising works similarly, because some combination of advertising, promotions, and other marketing caused the purchase through reach, branding, frequency, etc.

Google does a good job of explaining this in the video below. You only need to watch the first minute of the video though. After that, they try to provide you with a solution that also isn’t reasonable because it assumes all communications come from the company (friends and family are a huge part of purchase decisions!) and assumes only an online strategy. Nonetheless, they highlight the team approach very well.

Go Ahead and Do a Survey

Especially if you are being asked by someone who likes numbers, actually doing a “How did you hear about us?” survey will help your case. Those of us in advertising and marketing know that people have no idea where they see or hear things or, at a grander scale, even what causes them to purchase something. But others don’t. For these people, a simple, “How did you hear about us?” will help you prove the problems with measuring advertising ROI because people will report seeing or hearing from you in a lot of places you weren’t.

I used this approach years ago using Facebook advertising. I created Facebook ads that linked to a “please contact me” style form. The only way to get to the link and the form was through the Facebook advertising. But, just to prove my point, on the bottom of the form was the “How did you hear about us?” question with a listing of social media sites (Facebook, Twitter, MySpace, etc). Keeping in mind that they could not get to the survey through any other means than Facebook and the fact that they had just clicked on the link. Now, here’s the results: 50% of respondents clicked on some other social media site than Facebook. I know, I was shocked too, but that’s completely the truth.

Tell Me About Your Last Major Purchase?

Probably my favorite way of showing the difficulty of measuring advertising ROI, however, is to ask the person about themselves. I generally pick a car, but you can pick any major purchase, and then just ask them what specific ad caused them to make the purchase.

I used this technique with a friend of mine. In his case, he had just bought a new car so I asked him what specific advertisement had caused him to buy that particular car. At first, he pointed to the 0% financing deal that had just came out. But, after asking him if that really was the only thing that caused his decision, he then talked at length about how his family always buys Fords, how he had read a lot of good reviews on it, how he’d seen a lot of ads about what his particular Ford could do, and even how he had seen multiple ads for the 0% financing. After all of that, he went silent. Then he just said “I get what you mean now.” “Perfect,” I said and that was the end of the discussion.

What’s your favorite way of explaining the difficulty of measuring advertising and marketing ROI?

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